By Anna Lardinois, Startup Storyteller
To understand the runaway success of Milwaukee-based LeaseCrunch, you have to know a little bit about accounting.
Most businesses are required to follow Generally Accepted Accounting Principles. Commonly known as GAAP, these standards are put forth by the Financial Accounting Standards Board (FASB). Recently, the FASB changed the lease accounting standard, so all leases must now appear on company balance sheets. This change requires complicated calculations and will add countless hours to the workload of accounting departments across the nation.
In response to this change, LeaseCrunch was created. Launched in 2016, the SaaS (Software as a Service) company created an intuitive, scalable solution so accounting firms can easily collaborate with their clients to meet these new requirements.
The reception for LeaseCrunch has been overwhelmingly positive. The product won the Digital.com award for the Best Lease Software in 2021 and received Top New Product awards from Accounting Today in 2019 and 2022. As a result, a third of the Top 400 accounting firms are already users, with more firms of all sizes joining the ranks each week.
Backed by a seasoned investment group, this revenue-generating company was founded by CEO Ane Ohm, Chief Product Officer Timothy Kohler and Chief Technology Officer Matt Little. LeaseCrunch has been certified as a Qualified New Business Venture (QNBV) by the Wisconsin Economic Development Corporation (WEDC), meaning it has been identified as a company that offers “significant potential for increasing jobs or increasing capital investment in Wisconsin.”
MilwaukeeStartup.News sat down with LeaseCrunch CEO Ohm to talk about the rapidly growing company.
MSUN: What problem does LeaseCrunch solve for its users?
Ohm: Accountants are charged with getting hundreds of details right each day. When an accounting standard changes, it creates a lot of disruption. For the lease accounting standard, LeaseCrunch eases the burden of implementation and ongoing maintenance for lease accounting calculations.
The way the standard is written, the calculations – especially for footnote disclosures – are complicated. Without software, you’re at risk of a material misstatement on your financial statements due to those complexities.
MSUN: Who are LeaseCrunch’s clients?
Ohm: LeaseCrunch is uniquely designed for CPA firms so they can easily collaborate with their clients. We saw a critical need to optimize how CPA firms serve their clients through this change because this new standard affects so many organizations. Any organization that has even a single lease and issues GAAP financial statements must comply with this new lease standard, so it’s a big one.
Even though the standard has been coming for years and is effective starting with December 31, 2022 financial statements, most organizations have not yet begun implementation. And I understand that: when I was responsible for financial statements, I’d say, ‘Tell me the last moment I have to do something about that.’
As a result, we also knew that our solution had to be intuitive and easy to use. Accountants don’t want to waste extra time learning software in addition to a new standard. They just want accurate numbers as quickly and painlessly as possible. LeaseCrunch provides that.
Importantly, our robust solution makes sense for any size of lease portfolio because spreadsheets are unreasonably complicated even if you only have a handful of leases. When clients use LeaseCrunch through their CPA firm, there are no per-client minimums, making LeaseCrunch cost effective for all.
MSUN: Most reviews of LeaseCrunch mention how intuitive it is to use. How did the company accomplish that?
Ohm: Our CTO Matt Little always says that if you must train somebody to use your software, you’ve done something wrong.
Initial software design always feels like you’re working in a black box. You try to make good decisions and hope it’s great, but you won’t know until the marketplace confirms it for you. It’s been incredibly satisfying to hear rave reviews that LeaseCrunch is significantly easier to use than other accounting software.
In part, this is because we followed B2C (business to consumer) software design standards, mimicking the workflow and user design of personal applications you use every day.
MSUN: LeaseCrunch calls itself scalable. What does that mean?
Ohm: LeaseCrunch works for organizations with one to thousands of leases. We charge people for the leases they have, rather than on a per user basis. If it was per user, it would be cost-prohibitive for many accounting teams to use the software, which would in turn make it harder to use.
Let’s say you have four leases. We allow you to have as many people access those leases as needed, yet you’re only charged for four leases when you work through your CPA firm.
MSUN: Are you seeing the number of LeaseCrunch users grow?
Ohm: It’s been dramatic.
Starting this past May, right after year-end work and tax season, we’ve had big increases across the board: the number of firms signing up with us, the number of firm users added, the number of clients added, and the number of leases added. We expect this trend to continue through 2023 as financial statements must start incorporating the new lease standard.
MSUN: Is the LeaseCrunch team growing as well?
Ohm: Yes, and I couldn’t be prouder of the talent on our team. We’re attracting innovative, smart, curious people to provide software and expertise that accountants love and trust. For most of us, this is a once-in-a-lifetime opportunity. We are solving a new problem that organizations must address within the next year. Even though most team members reside in Wisconsin, we are a fully remote team, giving us all added flexibility.
To learn more about this rapidly growing company, connect with LeaseCrunch here.